This is a bit of a departure from my normal topics, but I believe that credit management starts with engagement and the expectations set during this period.
No matter what we do for a living we sell, whether it is a concept to a board, having an expense approved in a not-for-profit, or in my case providing credit management, terms of trade and investigation services.
When asked by other advisors how I build such good and enduring relationships with my clients my answer is simple – tell the truth at all times, whether it advances the process or stops it in its tracks.
I have been in B2B sales in one way or another for 20 years, from negotiating multimillion dollar government supply deals for a multinational document solutions company, to selling debt collection services to an owner operator with a few $300 debts.
I have seen literally hundreds of sales “professionals” pass by on my journey and one thing has remained a constant: those who are dishonest and self-serving never last and those with a genuine desire to benefit all parties in a situation, flourish.
A few years ago a sales manager, who I respect to this day as a friend and mentor, told me: “If you don’t have trust, you have nothing.”
Now, every time I talk to a client and provide advice on what products and services I can offer, I remind myself to consider whether when we meet up in a year’s time we will both remember the transaction as mutually beneficial.
If the answer is no, I will stop the sale – often to the surprise of the client/prospect.
After I have advised the client not to purchase a specific service of the range offered, more than once a client has told me they would have bought the product.
To this I reply: “Yes I know, but my job is to advise you, not to sell to you.”
A polished and slick – but not entirely honest – sales pitch may win you one sale, but it will lose you hundreds, along with your reputation.
Some might question my sales future with this approach, but stress not, there is method to my seeming madness.
There are two types of interaction pattern in sales.
Transaction-based and relationship-based. In a transaction pattern the prospect/client will contact you when they have decided that they are in need of and ready to buy a pre-determined product.
Compare this with a relationship pattern where the prospect/client will allow you to have a greater level of involvement and advise them not only what product they need, but also when they need it.
Showing a prospect/client that you are more interested in what positive effects your product/service can have for them, rather than what they can do to benefit you, is absolutely vital in building trust.
It is an essential element in creating longterm and fruitful commercial relationships.
In implementing the above, I have seen not only an increase in the number of clients that I have been able to assist, but also I have almost no cancellations, or requests for refunds and a 75 percent initial referral rate.
This means that 75 percent of my clients will refer another client to me within a week of meeting me.
In addition to this, I also end up with a 25 percent client advocacy rate, meaning that the rest of my clients actively and regularly find referrals to send to me, because of their assurance that I will advise accurately to the benefit of their referred client.
Transparency and realistic expectation in the engagement process, coupled with good follow through and service, will in my experience always translate into a decrease in disputes and written-off bad debts, and an increase in positive client experiences in any business.
In short, if everyone wins no one loses.
Just a thought.